Dr. Edward
W. Younkins is a Professor of Accountancy and Business
Administration at Wheeling Jesuit University in West Virginia. He
is the author of Capitalism and Commerce.

A REVIEW OF ANDREW BERNSTEIN'STHE CAPITALIST MANIFESTO

by Edward W. Younkins

Andrew Bernstein is best known as one of the most passionate,
interesting, and knowledgeable lecturers associated with the Ayn
Rand Institute. He is also the author of Cliff's Notes for Ayn
Rand's Anthem, The Fountainhead, and Atlas Shrugged
and the writer of the fine Objectivist-oriented novel, Heart of a
Pagan. His provocative new book, The Capitalist Manifesto,
is written for rational individuals everywhere and is a tribute to
men of the mind and to capitalism – the social system of freedom,
morality, individual rights, the human mind, creativity, wealth,
peace, and progress.

The system of the mind

The theme of Bernstein's powerful work is that capitalism is the
system of the mind. Part I of his book performs a practical task by
focusing on the nature and history of capitalism. Part II provides
rational, philosophical, moral, and economic explanations for
capitalism's superiority. Part III then refutes moral arguments
against capitalism and applies its principles to solving specific
issues and problems in society.

The author examines the
rise of capitalism in its full historical context. He explains that
capitalism was the outgrowth of European and American Enlightenments
and that the political, technological, and industrial revolutions of
the late 18th century involved the application of pro-reason
Enlightenment principles. The only nation founded on Enlightenment
themes and principles, the United States, became the center of
technological and industrial progress. During the 18th century in
Western culture, there was an emphasis upon reason, science, progress,
and the rights of men. Enlightenment thinkers, such as Newton and
Locke, espoused secular rationalism, metaphysical rationalism, the
inherent orderliness of nature, humanism, and the lawfulness of human
nature and the rest of nature.

Bernstein, a self-proclaimed hero-worshipper, discusses the heroes
of the Enlightenment as well as those of late 19th century America
which he labels as "The Inventive Period." In this work the author
clearly expresses his admiration for the "capitalist heroes of
history," including, but not limited to: Franklin, Jefferson,
Smith, Whitney, Carnegie, Rockefeller, Watt, Morse, Vanderbilt,
Hill, Morgan, Harriman, Edison, Jenner, Bell, Singer, Field,
Westinghouse, Eastman, Duryea, the Wright brothers, and Goddard.

Bernstein thoroughly
chronicles pre-capitalist systems of political economy. Before the
industrial revolution, there was widespread famine, filth, plague,
and destitution; and living standards in Europe were as low or
lower than in the poorest regions of the Third World today. He
documents how tyranny suppressed minds and rights and undermined
man's means to make technological and industrial advances. The
author also illustrates how the capitalist revolution of the late
18th century was based on its inherited scientific advances of the
Age of Reason.

The book discusses how the British industrial revolution in the late
18th century was an integral part of the Scottish Enlightenment.
Bernstein explains that the supposed Golden Age of workers in
pre-capitalist Europe is simply a myth and that capitalism and the
industrial revolution greatly raised living standards (e.g.,
sanitation and hygiene) and life expectancies. The author provides
much factual evidence to establish capitalism's historical
achievements compared with those of its predecessors with respect to
the enormous practical benefits it brings to man's life. According to
Bernstein, in two centuries capitalism has brought greater improvement
in the material conditions of men's lives than have the statist
regimes of all preceding centuries combined. He illustrates that
capitalism generates freedom and prosperity wherever it has been
implemented.

The author discusses the
enormous productivity of the so-called "Robber Barons" – the
productive geniuses who were enormous benefactors of the human race.
The Robber Barons, for the most part, were market entrepreneurs
(rather than political entrepreneurs) who succeeded by pleasing
customers and not through government subsidies and legislation. The
Robber Barons enriched more than they robbed, employed thousands
thereby giving stability to American families, and developed
innovations that benefited all Americans. In conjunction with this,
Bernstein explains that anti-capitalist historians such as Hofstadter
and Josephson ignored the role of the mind in the production of the
wealth achieved under capitalism.

Bernstein's magnum
opus thoroughly documents how capitalism eradicated impoverishment
and created prosperity. It explains how poor immigrants used their
rationality and free will to choose to emigrate to America and how the
poor in America employed their rational consciousness to "vote" to
work in factories rather than to toil in the farms and fields.

The only moral political-economic system

Part II of The
Capitalist Manifesto explains that capitalism embodies the
rational principles upon which human survival and prosperity depend
and that capitalism is the only moral political-economic system. The
philosophical and moral theories presented in this section are
grounded fully in the work of Ayn Rand. In addition, the economic
principles discussed are congruent with the works of Austrian
economists such as Ludwig von Mises and Austrian-Objectivists like
George Reisman. For me, this section on deeper philosophical and
conceptual issues was the most stimulating and interesting part of the
book.

Bernstein correctly
argues that rational egoism is a requirement of human life and is the
moral code underpinning capitalism. Capitalism liberates the creative
human mind which serves as man's survival instrument. The author
explains that morality arises only because of the objective factual
requirements of human survival and flourishing on earth and that what
is good is what promotes man's life.

"The Capitalist Manifesto
is interesting, jargon free, clearly written, and accessible to a wide
range of readers. It argues convincingly that wealth comes only from
adherence to the rational principles of the free enterprise system.
The book is a fine statement of the moral and economic arguments for
capitalism."

The author explains that
the mind's fullest functioning requires the legal protection
of individual rights. Each human being has the fundamental
right to act on his own thinking and thus requires
protection from the initiation of force or fraud. Capitalism
requires a government that protects rights and that does not
itself violate its citizens' rights and freedom. Bernstein
observes that the U.S. Constitution is flawed because it
allows the government to initiate force against American
citizens.

Egoism is the pursuit of
an individual's rational self-interest. Bernstein explains
clearly why a man should be the beneficiary of his own
actions. He validates egoism as a universal principle and as
the only proper moral code. He defends capitalism as the
logical political-economic consequences of an egoistic
approach to ethics and as the embodiment of rational
philosophical principles.

Bernstein maintains that
individual rights and capitalism are necessary for man's
life-gaining quest for values. He thoroughly discusses the
nature of value and the standard by which values are judged.
He explains that the concept of value is based on
metaphysical facts of reality and identifies the
relationship between values and the nature of human beings.
The ultimate value is an individual's life and the standard
of value is man's survival qua man. The author
identifies man's mind as the primary means to gain values,
to promote one's life, and to seek one's happiness. He also
describes virtues as a means by which a man achieves values.
It follows that productiveness is one of the moral virtues.

When men are free they
can use their minds to attain their goals and further their
lives. Bernstein explains that reason does not function
automatically and that irrationality is evasion or the
refusal to think. To use one's mind as a tool of survival
involves the choice to focus on reality. Focus involves a
man's decision to activate his mind and to be alert for
opportunities to form his ideas, values, and principles.

The author describes
altruism, the surrendering of values, as a code of
self-sacrifice. Rejecting altruism, he explains that each
human being should pursue and gain the values his life and
happiness require. He thus rejects Kant's ethics of duty
that maintains that each person has unchosen obligations to
others and thus should perform selfless service to them.
Kant's moral philosophy deprives self-interest of any and
all honor. The rejection of self-interest is also a
rejection of all human values because to pursue one's
self-interest means to pursue values and goals. Kant's
vision of morality thus consists of total, abject,
selflessness.

Economic ills are caused by statism

Bernstein illustrates
that capitalism is the only system that helps the poor, is
the cure for racism and bigotry, and is the solution for
problems in education and healthcare. He also explains that
slavery is founded on the initiation of brute force and that
abolition involves free capitalist nations struggling
against statist regions that reject individual rights. In
addition, the author evaluates the economic performance of
capitalist nations such as America, South Korea, Hong Kong,
and Taiwan versus that of socialist regions like Soviet
Russia, Cuba, Socialist Scandinavia, North Korea, and China.
Real-world performance indicates that the non-capitalist
nations of the world are not only repressed but have much
lower living standards. Bernstein observes that, when the
mind is suppressed, industrialization and technological
development are stifled. Furthermore, it is statism that
gives rise to evils such as war, imperialism, and slavery.

The author describes how
capitalism liberates both the producers who set the economic
terms and the customers who apprehend the value of products.
Economic calculation provides a standard of action for
planning under capitalism because of the existence of market
prices that result from the thinking and actions of
countless people. He explains how capitalism applies a
vastly greater and incalculable amount of knowledge and mind
power to solving problems of production and distribution
than does socialism. The author states that the problem of
socialism is that it requires economic planning without the
benefit of an intellectual division of labor.

The book details how
economic ills commonly ascribed to capitalism such as
monopolies, unemployment, inflation, and economic downturns
are actually caused by statism. Coercive monopolies stem
from the government making laws debarring entry into a
field. Unemployment results from minimum wage laws and the
granting of coercive power to unions. Inflation is a product
of government expanding the money supply which leads to
debasement of the monetary standard. Depression and
recession are brought about by regulations and interventions
that strangle the economy.

Statist regimes are at
chronic war with their own citizens and invariably hate
America, the world's freest nation. Bernstein observes that
statism needs war and survives by looting, whereas a free
country requires peace and survives by production. He states
that world peace requires the establishment of global
capitalism (i.e., international free trade). Capitalist
nations would protect their citizens' freedom of speech,
freedom of the press, and economic freedoms such as the
right to own property, to start their own businesses, and to
seek profits. Pre-capitalist and non-capitalist systems are
politically oppressive and economically destitute and their
citizens have few or no rights.

The charges that
capitalism is responsible for imperialism and slavery are
false. According to Bernstein, a government that fails to
recognize the rights of its own citizens exists under no
moral constraints with respect to foreigners. Individuals of
any nationality are its potential victims. Imperialism is
simply warfare to conquer a territory. Like war and
imperialism, slavery is founded on the initiation of force.
Slavery relies on force and thus undermines the role of the
mind in man's life.

A systematic treatment of
capitalism

Bernstein's masterpiece
provides a systematic treatment of capitalism as developed
over centuries through a number of disciplines including
philosophy, economics, political science, law, history, and
so on. The Capitalist Manifesto is interesting,
jargon free, clearly written, and accessible to a wide range
of readers. It argues convincingly that wealth comes only
from adherence to the rational principles of the free
enterprise system. The book is a fine statement of the moral
and economic arguments for capitalism. This tour de force
presentation thoroughly and eloquently addresses virtually
every question or criticism anyone has ever made about the
morality or practicality of capitalism.

This solid work is a real
contribution to understanding the philosophical, moral, and
economic underpinnings of capitalism. Its underlying theme
is that the mind is man's tool of survival and that the mind
requires freedom. Bernstein's well-written book persuasively
argues that capitalism rests on a sound moral foundation. By
doing that, it serves an essential function.

Although this book is
written for the educated generalist or layperson and the
college student, it should be read by everyone – especially
by journalists and politicians. Hopefully, it will be
adopted as a textbook both here and abroad with foreign
editions and translations. Bernstein's seminal work is a
triumph in the crusade for freedom and individual rights. We
certainly need more books like this.